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HomeMy WebLinkAbout14591RESOLUTION NO. 14591 A RESOLUTION INVITING LOCAL BUSINESSES TO SUBMIT REQUESTS FOR THE REDUCTION OR CANCELLATION OF LOANS FROM THE COVID-19 EMERGENCY PROJECT BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. Upon adoption of this Resolution, the Mayor is requested to direct City Staff to contact the thirty-four (34) local businesses which received loans from the COVID-19 Emergency Project, to invite such businesses to submit written requests for the reduction or cancellation of such loans, upon a showing that the repayment of such loans would cause substantial financial harm to such businesses. SECTION 2. The deadline for submitting such requests for loan cancellation or reduction shall be April 30, 2021. All requests for loan relief must include copies of all financial statements since the date of the loan and copies of the 2020 federal and income tax returns of the business. The City shall keep such financial and tax information strictly confidential. SECTION 3. The officers and staff of the City are authorized to perform any and all acts consistent with this Resolution to effectuate the policies and procedures described herein. SECTION 4. This Resolution shall become effective immediately upon final passage. INTRODUCED April 12, 2021 BY: Ed Brown MEMBER OF CITY COUNCIL APPROVED: PRESIDENT OF CITY COUNCIL ATTESTED BY: ACTING CITY CLERK City Clerk’s Office Item # M-11 Background Paper for Proposed Resolution COUNCIL MEETING DATE: April 12, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Belinda Kimball, Acting City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION INVITING LOCAL BUSINESSES TO SUBMIT REQUESTS FOR THE REDUCTION OR CANCELLATION OF LOANS FROM THE COVID-19 EMERGENCY PROJECT SUMMARY: Attached is a proposed Resolution inviting local businesses which received loans in 2020 from the COVID-19 Emergency Project to submit requests for the reduction or cancellation of such loans. PREVIOUS COUNCIL ACTION: On April 13, 2020, by Ord. No. 9698, the City Council established the COVID-19 Emergency Project within the Sales and Use Tax Capital Improvement Project Fund, commonly referred to as the “half-cent sales tax fund.” On April 13, 2020, by Resolution No.14394, City Council also transferred $5,000,000 from the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund to the COVID-19 Emergency Project. BACKGROUND: In 2020, thirty-four (34) local businesses received loans from the COVID-19 Emergency Project totaling $1,242,500. The COVID-19 pandemic and the State of Colorado’s subsequent public health orders have been catastrophic for many of the City’s local businesses. The potential failure of these at-risk local businesses (and the resulting loss of jobs) would cause economic harm to the City and its residents. Nearly a year after the public health crisis began, many of the businesses which received loans, have not recovered from the pandemic and are not in a financial position to repay the loans. City Council has directed that local businesses which are still struggling financially should be given an opportunity to request loan relief. FINANCIAL IMPLICATIONS: The COVID-19 Emergency Project could suffer a loss of up to $1,242,500, but the half-cent sales tax fund currently contains sufficient unobligated monies to absorb this loss. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: City Council has the option of not giving local businesses an opportunity to apply for loan relief. RECOMMENDATION: The Mayor and City staff support the adoption of the proposed Resolution. Attachments: Proposed Resolution.